COLLECTED WISDOM™ on 401k Hardship Withdrawals
This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.
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Hardship distributions are a valuable component of many 401k retirement plans. They encourage participation in the plan and provide a sense of security to participants as they seek a balance between retirement savings and current financial needs. But plan sponsors need to know the rules and administer hardship withdrawals carefully.
Hardship Distributions: What Retirement Plan Sponsors Need to Know About Complying With Recent Changes
Efforts to keep up with the myriad of challenges that retirement plan sponsors faced in 2020 may have caused some to overlook significant changes related to hardship distributions that were enacted before the onset of the COVID-19 pandemic. Now is the time for plan sponsors to examine whether they are complying with these changes in how they administer their plans and whether their plan documents accurately reflect these changes.
Source: Bdo.com, March 2021
Self-certification facilitates automation of the hardship approval by the recordkeeper. However, electronic approval of hardship distribution requests through the plan website is not always the default. Thus, there continue to be instances in which neither backup nor compliant self-certifications were obtained for hardship distributions. Unfortunately, self-certification does not mean that an email or a phone call from the participant is sufficient.
Source: Belfint.com, January 2021
The economic strains occasioned by the pandemic have had wide-ranging effects, and one of the actions put in place is to ease the rules concerning hardship withdrawals and loans. But availability has not made them a widespread response to economic challenges, recent studies have found. Loan and hardship distribution usage were relatively low in 2019, says T. Rowe Price in its Reference Point Annual Benchmarking Report. They report that while hardship distributions did grow in 2019, they only did so by 1.5%. They attribute the low levels to improved market conditions.
Source: Asppa.org, July 2020
Low- to moderate-income retirement plan participants have mostly turned to reducing their spending levels and using credit cards to find financial relief during the pandemic; however, more will be turning to their retirement plans for liquidity, according to research from the nonprofit Commonwealth and the Defined Contribution Institutional Investment Association Retirement Research Center.
Source: Planadviser.com, July 2020
IRS Expands Definition of Qualified Individuals for Purposes of CARES Act Plan Distributions and Loans
On June 19, 2020, the Internal Revenue Service released Notice 2020-50 to help retirement plan participants affected by COVID-19 take advantage of the CARES Act provisions providing enhanced access to plan distributions and plan loans. Among other provisions, Notice 2020-50 expands the categories of individuals eligible for CARES Act distributions and loan treatment.
Source: Clarkhill.com, June 2020
This IRS notice provides guidance relating to the application of section 2202 of the CARES Act for qualified individuals and eligible retirement plans. The guidance in this notice is intended to assist employers and plan administrators, trustees and custodians, and qualified individuals in applying section 2202 of the CARES Act, including guidance on how plans may report coronavirus-related distributions.
Source: Irs.gov, June 2020
If an affected taxpayer makes a qualified COVID-19 withdrawal, the funds are not limited to COVID-19 related expenses such as medical bills. They can be used for any purpose, such as food, rent utilities, paying off credit cards or helping another family member or any other purpose for that matter. The CARES Act is fairly broad as to who qualifies for a COVID-19 related hardship distribution.
Source: Belfint.com, April 2020
The Federal Emergency Management Agency has declared several disaster areas around the United States as a result of the spread of the coronavirus. Under final regulations issued in 2019, a federal disaster declaration has become one of the safe harbor reasons that qualifies a 401k or 403b plan participant for a hardship distribution, so it appears that plan participants may now be able to take a hardship withdrawal if they are laid off, put on an unpaid leave of absence or incur other expenses and losses on account of COVID-19.
Source: Beneficiallyyours.com, March 2020
The new provision is optional, so plan sponsors will need to amend their plans to permit QBOADs and, as a separate option, to permit the repayment of QBOADs. Although discretionary plan amendments are due by the end of the plan year in which they take effect, the SECURE Act provides that plan amendments for its changes will not be due before December 31, 2022, for calendar year plans, or the last day of the first plan year beginning on or after January 1, 2022, for fiscal year plans.
Source: Belfint.com, March 2020
This multi-video series will provide a snapshot of retirement-related SECURE Act provisions, included in the Further Consolidated Appropriations Act, 2020. This video covers qualified birth or adoption distributions.
Source: Ascensus.com, March 2020
One way that employers can assist employees faced with coronavirus-related costs and expenses today (no Congressional action or immediate employer action required) is that employers can permit employees to take hardship withdrawals from their 401k plan accounts to meet coronavirus-related expenses. The employee will still need to meet the requirement that the distribution is necessary to satisfy the financial need. There are two possible mechanisms for permitting these hardship withdrawals.
Source: Stevenslee.com, March 2020
While the rules on resuming deferrals after a hardship distribution have recently been relaxed, we are in a bit of a transition period through the middle of 2020 where the correct way to handle situations like this can be a bit confusing. The answer varies based on timing and decisions.
Source: Dwc401k.com, February 2020
For 401k plans that permit hardship distributions, the rules changed, beginning on January 1, 2020. Make sure that your plan sponsors clients are administering their plan to the following mandatory changes.
Source: Jdsupra.com, February 2020
In light of the Bipartisan Budget Act of 2018 that made it easier for participants to take a hardship instead of a loan, plan sponsors still have some options for mitigating 401k leakage.
Source: 401kspecialistmag.com, February 2020
The IRS has now included amendments for the final hardship distribution regulations in its 2019 RAL, thus requiring affected 401k and 403b plans to be amended by no later than Dec. 31, 2021.
Source: Clarkhill.com, December 2019
Revenue Procedure Clarifies Which Hardship Amendments are Deemed Integral to a Qualification Provision
This revenue procedure clarifies which amendments are treated as integral to a plan provision that fails to satisfy the qualification requirements of the Internal Revenue Code by reason of a change to those requirements made by the recently published regulations under sections 401(k) and 401(m) relating to hardship distributions of elective deferrals. This revenue procedure also extends the deadline, applicable to pre-approved plans, for adopting an interim amendment relating to those regulations. The deadline is extended to December 31, 2021.
Source: Irs.gov, December 2019
The IRS has issued Revenue Procedure 2020-09, guidance that extends the deadline for pre-approved retirement plans to amend for final IRS hardship regulations published in September 2019. The amending deadline for these plans is extended to December 31, 2021.
Source: Ascensus.com, December 2019
Employers that sponsor 401k plans have moved quickly to incorporate new, more liberal, hardship withdrawal provisions, but most have not yet seen an uptick in participants taking advantage of the new rules, according to a new snapshot survey by the Plan Sponsor Council of America.
Source: Psca.org, December 2019
Plan sponsors have moved quickly to incorporate new, more liberal hardship withdrawal provisions, but that have not seen an increase in the number of participants taking advantage of them, says a new survey by the Plan Sponsor Council of America.
Source: Napa-net.org, December 2019
In late September 2019, the IRS issued its final hardship distribution regulations. There were very few changes between the proposed regulations published late last year and the recently published final regulations. Here are the hardship distribution rules based on the final regulations. Plan sponsors should speak with their third-party administrator/recordkeepers about the new rules to ensure that the required changes are made for hardship distributions taken on or after January 1, 2020.
Source: Tri-ad.com, November 2019
On September 19, the IRS released final hardship regulations that were previously issued in proposed form on November 9, 2018. The final regulations contained substantive changes to the previously issued proposed regulations. This article provides an overview of some of the changes set forth in the proposed regulations that were retained in the final regulations and become effective beginning in 2020.
Source: Hallbenefitslaw.com, November 2019
On September 23, the IRS published final regulations amending the rules governing hardship distributions from 401k and 403b plans pursuant to changes contained in the Bipartisan Budget Act of 2018. The final regulations, summarized here, largely mirror the proposed regulations that the IRS published in November 2018, and include helpful clarifications on the changes and plan amendment timing.
Source: Groom.com, October 2019
The U.S. Department of Treasury, acting through the IRS, issued final regulations governing hardship distributions (also known as hardship withdrawals) taken from 401k retirement plans. Aside from some clarifying details, the final regulations are substantially similar to the proposed regulations that were issued in November 2018.
Source: Compliancedashboard.net, October 2019
401k and 403b plans aim to assist employees in saving for retirement. To encourage employees to make contributions, these plans allow participants to access their savings prior to retirement in certain limited circumstances, including a severe financial hardship for the participant or his or her beneficiaries. The new regulations make changes to the process that determines whether a participant may receive a hardship withdrawal from their 401k or 403b plan account. These changes reflect recent legislative developments.
Source: Ballardspahr.com, October 2019
The IRS recently released final regulations making a number of significant changes to the rules applicable to hardship distributions from 401k and 403b plans. This article focuses on two specific issues: (1) the elimination of the six-month suspension of contributions following a hardship distribution; and (2) the revised standard used to determine whether a hardship distribution is necessary to meet the financial need.
Source: Erisapracticecenter.com, September 2019
The Internal Revenue Service (IRS) has finalized revisions to the regulations governing hardship distributions under 401k and 403b plans. The final regulations make some subtle but important changes to the regulations that were issued in proposed form in 2018 and provide some helpful clarification on how and when the final regulations apply. This article discusses those changes, summarizes other guidance and reminders in the final regulations, and lists the various effective dates and amendment deadlines for the final regulations.
Source: Bradley.com, September 2019
It just got easier to take money out of your 401k or 403b retirement plan. The IRS has issued final rules on hardship withdrawals that spell out a host of changes meant to cut down on red tape. Some are mandatory, employers must make the changes as of Jan. 1, 2020, and other are optional. So, how lenient your retirement plan rules are still depends in part on your employer.
Source: Forbes.com, September 2019
On Thursday, September 19th, the IRS finalized the hardship regulations that were previously issued in proposed form on November 9, 2018. While finalized regulations often differ from proposed regulations, due to the IRS considering written comments, these final regulations contain no substantive changes. There are, however, some issues raised by the IRS in the final regulations that are worthy of note.
Source: Cammackretirement.com, September 2019
This document contains final regulations that amend the rules relating to hardship distributions from section 401(k) plans. The final regulations reflect statutory changes affecting section 401(k) plans, including changes made by the Bipartisan Budget Act of 2018.
Source: Federalregister.gov, September 2019
According to a survey on Bankrate.com, 60 percent of Americans do not have sufficient funds saved to enable them to pay for an unexpected emergency expense. The failure to save money is at epidemic levels. One way that an individual can deal with desperate circumstances (or more-than-normal financial needs, in some circumstances) is to use his or her retirement savings. The Internal Revenue Code permits distributions from retirement plans in limited circumstances due to hardship. Those IRS rules are discussed here.
Source: Ferenczylaw.com, August 2019
Participants who have taken a hardship withdrawal are nearly three-times more likely to feel "always" stressed in general and three-times more likely to have "a lot" of stress about their financial situation. A new guide published by Fidelity examines the critical topic of retirement plan hardship withdrawals, with the objective of improving the long-term financial health of those who take them.
Source: Planadviser.com, July 2019
Since several provisions of the Budget Act were slated to be effective as early as January 1, 2019, it is important to understand the content of the proposed hardship regulations now in order to be poised to take advantage of them once they are finalized. This article discusses the content and impact of the proposed hardship regulations.
Source: Legacyrsllc.com, March 2019
Occasionally an employee may experience a serious financial need. With no other help available, raiding a retirement plan may be the only option. Prior to 2019, employees and employers alike may have faced hurdles when wrestling with a hardship distribution. Due to new laws, however, hardship distribution rules are changing in 2019.
Source: Hallbenefitslaw.com, February 2019
A 401k plan may allow employees to receive a hardship distribution because of an immediate and heavy financial need. But often hardship distributions are not made properly. This document reviews how to fix the mistakes.
Source: Irs.gov, February 2019
The new year brings significant changes to hardship distributions under 401k plans and 403b plans. The hardship distribution changes are effective for distributions made in plan years beginning after December 31, 2018, unless otherwise specified. Final comments on the proposed implementing regulations were due on January 14, 2019, and final regulations should be issued later this year. In the meantime, plan sponsors should look to the proposed regulations for implementing guidance.
Source: Truckerhuss.com, February 2019
Typically, retirement plan sponsors intend for the funds contained in a retirement plan to be held until the participant retires. Under some circumstances, a participant may need the money now. Some retirement plans allow participants to receive hardship distributions, though they are not required to do so. This article examines some common questions about hardship distributions.
Source: Hallbenefitslaw.com, January 2019
The IRS recently issued proposed regulations to implement changes to the rules for hardship distributions from 401k plans made by the Bipartisan Budget Act of 2018 that will take effect on January 1, 2019. The proposed changes will make hardship distributions more widely available and will ease administration of hardship distributions for plan sponsors.
Source: Hansonbridgett.com, December 2018
In this episode of the Proskauer Benefits Brief, Paul Hamburger co-chair of Proskauer's Employee Benefits & Executive Compensation Group, and associate Steven Einhorn discuss the recently proposed IRS regulations addressing the hardship withdrawal rules affecting 401k and 403b plans.
Source: Erisapracticecenter.com, December 2018
Starting January 1, 2019, participants will again be able to take a hardship distribution for casualty losses to a primary residence even if not in a disaster area. However, the IRS took it one step further. The new regulations now include a provision permitting hardship distributions to cover certain losses resulting from federally declared disasters. Not only will participants no longer have to await separate guidance from the IRS for future disasters, but the IRS also made this particular change available retroactive to 2018 to cover hurricanes Michael and Florence.
Source: Dwc401k.com, December 2018
The Treasury Department issued highly anticipated proposed regulations governing hardship withdrawals from 401k plans. The proposed regulations address recent statutory changes made to the hardship withdrawal rules under Code Section 401k. In addition, the proposed regulations eliminate the requirement under the existing regulatory safe harbor to suspend the participant's elective deferrals or employee contributions for a period of six months following receipt of a hardship withdrawal.
Source: Employeebenefitsupdate.com, December 2018
The proposed hardship regulations were issued less than a month ago, but there already appears to be a lot of misunderstanding among plan sponsors and those who work with them. This article reviews some of the biggest misconceptions.
Source: Cammackretirement.com, December 2018
Though the regulations are only proposed, 401(k) plan sponsors should promptly consider these changes because decisions should be made on applying certain optional changes, which generally can be effective for plan years beginning after December 31, 2018.
Source: Mwe.com, November 2018
Plan sponsors and recordkeepers have been eagerly anticipating IRS guidance on changes to the hardship distribution rules made by the Bipartisan Budget Act of 2018, which are effective for plan years beginning on or after January 1, 2019. These changes impact 401k plans that offer hardship withdrawals, which provide active participants the ability to receive their elective deferrals prior to reaching age 59-1/2. They also impact 403b plans.
Source: Groom.com, November 2018
The Internal Revenue Service has issued proposed regulations that would change the rules for hardship distributions from 401k and 403b plans. The proposed regulations are scheduled to be published in the Federal Register on November 14, 2018. The provisions of the unpublished draft are summarized here.
Source: Ktserisacorner.com, November 2018
As a general rule, there are two key components for a permissible hardship distribution: (1) the withdrawal must be made due to an immediate and heavy financial need; and (2) the amount of the withdrawal must be limited to the amount necessary to satisfy that financial need. Existing regulations provide detailed rules for how plan participants can prove each requirement is met when requesting a withdrawal. The Proposed Regulations would modify and relax many of these rules to conform to new law changes.
Source: Erisapracticecenter.com, November 2018
How strictly does the IRS interpret what costs qualify as being associated with the purchase of a primary residence? Is there any wiggle room that would allow renovation costs to qualify for a hardship withdrawal for purchase of a primary residence?
Source: Dwc401k.com, October 2018
While the Bipartisan Budget Act of 2018 modified the safe harbor rules for hardship withdrawals starting in the 2019 plan year, the extent to which these modifications will impact 403b plans is still subject to open to interpretation.
Source: Ntsa-net.org, August 2018
This article describes recent legislative changes affecting hardship withdrawals and plan loans and some of the issues plan sponsors and practitioners must confront.
Source: Asc-net.com, July 2018
In Information Letter 2018-1, the IRS responded to a U.S. Congressman who asked why his constituent could not take a hardship distribution from his 401k plan to pay off his daughter’s college student loans. The IRS explained that a hardship distribution must, among other things, be necessary to satisfy an immediate and heavy financial need. The IRS confirmed in the Letter that because a safe harbor hardship distribution may be made only for the prospective payment of education expenses, it cannot be made for the repayment of student loans.
Source: Drinkerbiddle.com, July 2018
The Bipartisan Budget Act of 2018 includes several changes to the rules governing hardship withdrawals from 401k plans. Because the changes apply to plan years beginning after December 31, 2018, plan sponsors should start considering their options now and make decisions regarding which changes, if any, to implement to allow plenty of time to develop and timely distribute participant communications, update procedures and re-program plan administrative systems (including coordination with the plan recordkeeper's systems) and amend their plan documents.
Source: Employeebenefitsupdate.com, July 2018
During a 401k audit, hardship distributions are a common area where failures are discovered. The plan sponsor is often unaware that they were required to gather supporting documentation, and they have approved the distribution without verifying that an immediate need existed.
Source: 5500audit.com, July 2018
Recent IRS guidance and legislative changes discussed here show that this is an area where both plan sponsors and participants may still have questions.
Source: Laboremploymentperspectives.com, June 2018
The Bipartisan Budget Act of 2018 brings important relief for plan sponsors and recordkeepers for tax-qualified retirement plans. This relief includes (1) relaxed hardship withdrawal rules, (2) expanded rollover for improper federal tax levies, (3) California wildfire relief for plan distributions, and (4) a special Congressional committee to address the major funding concerns for multiemployer plans.
Source: Groom.com, April 2018
The Act directs the IRS to modify the 401k regulations, within one year from February 9, 2018, to remove the six-month prohibition on contributions following receipt of a hardship distribution and to make "any other modifications necessary to carry out the purposes of" the Internal Revenue Code applicable to hardship distributions from 401k plans.
Source: Bradley.com, April 2018
The recently enacted Bipartisan Budget Act of 2018 included some unanticipated provisions that directly affect retirement plans. One such provision relates to the availability and amount of hardship withdrawals made under 401k plans. This article summarizes the impact of these new rules.
Source: Legacyrsllc.com, March 2018
The Bipartisan Budget Act of 2018 was passed into law on Feb. 9, 2018 and introduces some unexpected changes for retirement plans. The most significant of the Act's changes for retirement plans reduces the existing restrictions on hardship distributions from 401k and 403b plans.
Source: Icemiller.com, February 2018
The Tax Cuts and Jobs Act indirectly changed one of the safe harbor bases for hardship distributions. For tax years 2018-2025, the new law limits casualty loss deductions to those occurring in a federally declared disaster area. Plans that use hardship distribution safe harbors that reference this deduction should consider how they will address requests for losses that occur outside of a federally declared disaster area.
Source: Conduent.com, February 2018
The Bipartisan Budget Act of 2018 contains changes to the ways in which hardship withdrawals from qualified retirement plans are administered. The changes reviewed here are effective for plan years beginning after December 31, 2018.
Source: Consultrms.com, February 2018
President Trump has signed the Bipartisan Budget Act of 2018 into law, avoiding another federal government shutdown. That law includes provisions that make hardship withdrawals more attractive: removing barriers, increasing available monies, and removing the suspension of contributions.
Source: Psca.org, February 2018
The bill calls for the Secretary of Treasury to amend regulations to delete the six-month prohibition on contributions to a retirement plan following a hardship withdrawal. The allowance of hardship withdrawals is also extended in the bill to contributions to a profit sharing or stock bonus plan, qualified non-elective contributions (QNECs) and qualified matching contributions (QMACs) and earnings on the contributions now allowed.
Source: Planadviser.com, February 2018
The recently enacted tax reform legislation, commonly referred to as the Tax Cut and Jobs Act, made a change to the types of personal casualty losses that qualify for a casualty deduction under Section 165 of the Internal Revenue Code. This change affects many 401a, 401k, and 403b plans that permit hardship distributions to be made available to their participants and beneficiaries.
Source: Voya.com, January 2018
In the wake of any new tax law, there are always issues that cause problems when they are actually put into practice. One such issue is that hardship withdrawals from a 401k plan to address a personal casualty loss of a principal residence may no longer be allowed unless the loss is attributable to a federally declared disaster area.
Source: Asppa.org, January 2018
New substantiation guidelines for safe harbor hardship withdrawals have been issued by the IRS. The guidelines made it clear that hardship withdrawals must be substantiated with the proper form of documentation to be a valid distribution, so employers and third-party administrators must understand the guidelines prior to approving hardship distributions.
Source: Lindquistcpa.com, November 2017
In these difficult economic times, more participants are considering the option of taking a hardship withdrawal. A participant can only take a hardship withdrawal if it is permitted by the plan and they have an immediate and heavy financial need. This checklist can be used when faced with the task of reviewing and approving hardship requests.
Source: Consultrms.com, November 2017
The IRS released a Memorandum to its agents setting forth the substantiation they should expect to see for 401k plan hardship distributions issued. The IRS agents were instructed to examine source documents if they are obtained by the employer or third-party administrator, OR to examine the summary of documentation that the hardship distribution recipient will maintain.
Source: Belfint.com, August 2017
Many employers contract with a third-party administrator or platform vendor to administer the hardship application and approval process. But, even if outsourced, employers are the ones at risk of tax liabilities or plan disqualification if the process is not consistent with the very limited authority for early distributions on account of hardship contained in the Code and related regulations.
Source: Frostbrowntodd.com, August 2017
Although many providers have used online, participant self-certification to process hardships, serious questions remain whether this process is adequate and the employer, not the provider, remains responsible for any improper hardships. Recent changes to IRS audit guidelines for its examiners indicate the IRS may be more flexible than in the past if certain notice and documentation requirements are met.
Source: Wnj.com, July 2017
The IRS recently issued two pieces of long-awaited guidance to facilitate qualified plan operations. The first was the issuance of proposed regulations that would permit forfeitures to be used to fund safe harbor contributions and other corrective contributions. The second was the issuance of new audit procedures regarding the substantiation of hardship distributions, which permits a method of substantiating hardship distributions without having to review and retain the underlying support documentation to show the immediate and heavy financial need for a safe harbor hardship distribution. The new guidance is summarized in this article.
Source: Groom.com, June 2017
The IRS recently issued an internal memorandum providing guidance to its employee plans examination group on the substantiation requirements for hardship distributions from a section 401k plan. If your 401k plan recordkeeper has not talked to your company lately about hardship distributions documentation, it may be time to reach out to the recordkeeper.
Source: Erisapracticecenter.com, May 2017
Plan sponsors may also elect to add a "hardship withdrawal" option for employees in their 401k or 403(b) plan. This is an optional provision that must be outlined in the plan document before it is available to the participants of the plan.
Source: Benefit-resources.com, April 2017
The IRS has released audit guidelines which provide a roadmap for employers to demonstrate that they are properly handling hardship distributions.
Source: Relius.net, April 2017
Employees no longer routinely have to provide their employers with documentation proving they need a hardship withdrawal from their 401k accounts, according to the Internal Revenue Service (IRS). Employees do, however, need to keep source documents, such as bills that resulted in the need for hardship withdrawals, in case employers are audited by the IRS, the agency said.
Source: Shrm.org, April 2017
This is a list of specific documents that the employer must collect based on each type of hardship. The employee must keep these documents available for the employer at all times.
Source: Castlerockinvesting.com, March 2017
After an extended period of uncertainty about what constitutes acceptable substantiation of a hardship withdrawal request, new guidelines for IRS examiners provide clarity. While traditional means of gathering source documents continue to be acceptable, the new guidelines set forth requirements that allow plans to use a summary of those documents instead.
Source: Conduent.com, March 2017
Should your 401k plan ever come under audit by the IRS, your documentation will be critical to a swift resolution of the examination. This article covers hardship distribution best practices which can also serve as a helpful checklist.
Source: Bsllp.com, March 2017
401k Hardship Distribution regulations provide that certain safe harbor distributions will be deemed to meet the "immediate and heavy financial need" requirement (for example, deductible medical expenses); however, plans are required to substantiate that the distribution meets the requirements for the specific type of safe harbor distribution.
Source: Bradley.com, March 2017
Many plan sponsors and third-party administrators limit hardship distributions to the safe harbor reasons so as to avoid a "facts and circumstances" review of a hardship request, but the safe harbor rules to avoid such review include more than simply restricting hardship distributions to the safe harbor reasons. Errors involving hardship distributions are among the top ten compliance issues found by the Employee Plans Team Audit Program of the IRS.
Source: Aon.com, March 2017
This memorandum sets forth substantiation guidelines for EP Examinations employees examining whether a 401k plan hardship distribution is "deemed to be on account of an immediate and heavy financial need" under safe-harbor standards.
Source: Irs.gov, February 2017
The IRS has published new examination guidelines for documenting a hardship distribution. Specifically, the memorandum sets forth substantiation guidelines for EP Examinations employees examining whether a 401k plan hardship distribution is "deemed to be on account of an immediate and heavy financial need" for safe harbor distributions.
Source: Asppa.org, February 2017
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